The "caution" alert for natural gas was lifted entirely.
Vice Industry Minister Moon Shin-hak reported the energy supply plan at a Cabinet meeting doubling as an emergency economic response session at the presidential office in Seoul, where President Lee Jae-myung also presided.
The alert system runs across four stages — attention, caution, watch and serious — with levels declared according to the severity of a crisis and its impact on daily life and the economy.
The government first issued an "attention" alert for crude on March 5, after the Middle East war erupted, then raised it twice as the Strait of Hormuz blockade dragged on.
Officials said the downgrade reflected a marked improvement in supply. Korea has already secured more than 100 percent of its usual July crude volumes and over 95 percent of its naphtha, while August crude procurement has climbed past 90 percent.
"Crude supplied through Saudi Arabia's Yanbu port and the UAE's Fujairah port, which bypass the Strait of Hormuz, has increased flawlessly," Moon said, adding that imports of non-Middle Eastern crude, led by American grades, had expanded firmly in tandem with a strategic reserve swap arrangement.
Natural gas worries sparked by Qatar's March force majeure declaration have eased, with replacement volumes now locked in through year-end.
With crude and LNG supplies steadying and regional tensions cooling, the government will phase out emergency measures, ending subsidies for diversified crude freight, reserve swaps and alternative naphtha imports on Tuesday, though naphtha and petrochemical supply steps will continue beyond July to guard against intermittent bottlenecks.
Demand-management rules for the public sector will be scrapped altogether. The government had planned to ease, rather than fully lift, vehicle-use restrictions on state agencies, but reversed course and abolished them entirely after Lee dismissed the curbs as ineffective.
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